Saudi Arabia can cope with low oil prices for "at least eight years", Saudi Arabia's minister of petroleum's former senior adviser has told the BBC.
Mohammed Al-Sabban said the Kingdom’s policy was to defend its current market share by enduring low prices.
"You need to allow prices to go as low as possible in order to see those marginal producers move out of the market," he said.
Sabban advised the ministry for 27 years, leaving last year.
“Saudi Arabia can sustain these low oil prices for at least eight years. First, we have huge financial reserves of about SR3 trillion (£527 billion). Second, Saudi Arabia is embarking now on rationalizing its expenditure, trying to take all the fat out of the budget,” Sabban told the BBC’s World Business Report.
Without cuts in spending on infrastructure, sports stadiums and new cities, Saudi Arabia can withstand low oil prices for at least four years, he said, suggesting that lower oil prices could have long-term benefits for Saudia Arabia.
Saudi Arabia has refused to cut production despite a more than 50 percent fall in the price of oil since last summer.
“To shorten the cycle, you need to allow prices to go as low as possible to see those marginal producers move out of the market on the one hand, and also if there is any increase in demand that will be welcomed.”
His comments were a further signal that Saudi Arabia was prepared to use its financial strength to ride out depressed oil prices.
The price of crude oil has more than halved since June 2014 because demand has weakened, particularly from China, while the US shale boom has increased global production.
World oil prices fell Monday, dented by high global crude inventories, in subdued deals amid a public holiday in the United States, dealers said.
In early afternoon London deals, Brent North Sea crude for delivery in March fell 48 cents to trade at $49.69 per barrel.
US benchmark West Texas Intermediate for February shed 52 cents to $48.17 a barrel.
Trading was expected to remain quiet amid the Martin Luther King Jr holiday in the United States on Monday.
"Crude oil prices continue to remain under pressure, starting the week on the negative side amid persistent concerns regarding high levels of crude oil inventories along with a slowdown of global oil demand growth," said Sucden analyst Myrto Sokou.
"As the US equity and bond markets are closed for the Martin Luther King holiday, trading volumes might remain thin during today's session."
Crude futures had rebounded on Friday after the International Energy Agency declared there were signs "the tide will turn" in the battered market following recent multiyear lows.
Phillip Futures analysts said in a market commentary: "Although it may seem like prices are reversing already, fundamentals have not changed.
"Oversupply and weak demand is still prevalent in the market and, thus, (we) would not expect prices to rally just yet."
Oil prices have more than halved since June, crashing on worries over global oversupply and weak demand in a stuttering world economy.
The fall was exacerbated at the end of November when the Organization of the Petroleum Exporting Countries (OPEC) said it would maintain output levels, despite the already low price and ample supplies.
Brent last week collapsed to $45.19, the lowest level since March 2009.
Brent crude slipped back below the $50 a barrel mark on Monday, falling 1.8 percent to $49.29, as traders expected gloomy economic growth figures from China on Tuesday and a bond-buying program by the European Central Bank on Thursday aimed at stimulating the eurozone economy.
